3-Year QPP Analysis For Equity ETFs

Includes: IVE, IWN, PCY, VB, VTI, VTV
by: Lowell Herr

After a previous post that used four years of historical data, the following table (see below) uses a "default" period of three years. What a difference one year makes. I've only seen this much "blood" when the market was at or near a peak.

Not one equity or bond ETF is showing up as a "Buy" and many are signalling a "Sell." Think back where the market was some three years ago. Look at the historical records and compare those results with the projections going forward. If one places any confidence in reversion-to-the-mean arguments, we are in for a correction over the next few months. For this reason, if investors are interested in protecting the corpus of their holdings, now is a good time to be following the ITA Risk Reduction Model. I know I will be watching the data carefully.

Will the market experience a 10% to 20% decline? Yes, but none of us knows when and that is why we are going to use the 195-Day EMA as our trigger line.

Once more, place 10% of the available cash into the asset classes of choice and then wait for a better buying opportunity. Be selective in the ETFs your use to populate asset classes of interest. I have another set of tickers I will report on later in the day or early tomorrow. If there is sufficient historical data, I will put up both three- and four-year "Delta Factor" projections as that last bear market and the subsequent recovery is having a huge impact on the projections.

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